The Domain First Home Buyer Report has been released for 2022, highlighting the biggest trends in property acquisition for young Aussies. And in news that is surprising to no one, the data shows that the time it now takes for young Australians to save for their first home is substantially longer than in previous years – must be all the smashed avo we ate in lockdown.
In short, the headlines from this report are fairly depressing. So, let’s rip this off like a bandaid and move through them quickly, yeah?
What the reality is for a young Australian saving for a property in 2022
According to Domain’s report (which references data from the ABS and Grattan Institute), not only have property prices gone up, they have skyrocketed in the last decade. Wages are not even close to keeping up with the increase in property prices, and the time it takes for young couples (single buyers aren’t even mentioned) has also jumped up.
In addition to all that, the report showed that housing costs in Australia are a higher share of income than in many other similar countries. I.e. We appear to be more screwed than other places. But I guess no one wants to work anymore, hey Kim K?
Here are the key points highlighted by Domain:
- Over the past decade, house prices across the combined capitals increased by 101%, and unit prices by 52%. In Sydney and Melbourne, house prices have increased by 153% and 107% respectively.
- Wages have not kept pace with escalating property prices. Over the past 20 years the average annualised property growth in capital cities is 6.9% and for regionals 7.1%, whereas annualised wage price growth is less than half at 3%.
- Saving for an entry-house for a couple aged between 25 and 34 will now take 11 months longer annually across capital cities, taking a total of 5 years and 8 months. Time to save for entry units has risen by 3 months, taking 3 years and 6 months.
- Sydney continues its reign as the city to have the longest time to save an entry priced house deposit, at 8 years and 1 month. Canberra has overtaken Melbourne in second place.
So, in short. Things are tough. If you’d like to see this gloomy wrap up in graph form, that is available for you here too.
You can see a full breakdown of the time it takes to save a 20 per cent deposit as a young couple in Australia according to state or territory below.
There are some positive highlights to look at, however.
Where are things looking slightly more positive
If you’re interested to learn about which areas are doing slightly better in terms of price spikes for property, we do have data on that, too.
Here are the highlights:
- Perth remains the best city for first home buyers, with the quickest savings time at 3 years and 7 months for an entry-house, and 2 years and 6 months for an entry-unit.
- Entry houses and units in Perth, Darwin, and Adelaide offer the greatest mortgage affordability.
Want to read the whole report? You can find that here.
If this has you feeling like you may never own a home or save a deposit, you can read about how much the average rent in Australia is here.